Oil and Energy Wars

The Wall St. Journal this morning report, for example, that Russia looks to be headed into a recession in 2015 and that’s the kind of thing that the West might look at with some satisfaction, in that it’s Russia punitive actions have really started to bite and bite hard.

This has tremendous implications for investors in things like precious metals: Don’t dismiss our long-standing belief that as the world’s economies go into their last-gasp death throes that gold could sink well under $1,000 before printing money goes absolutely crazy in a few years.

Commodity prices have stabilized going into the open and there has been oil trading back up to the $68 range, but that doesn’t eliminate the “rig lay down” issue covered in Monday’s report. Below a certain level ($60-$75 and we could argue that all day) putting in new rigs doesn’t make sense.

As one reader noted, when you hear ads on the radio to bring new investors into the oil and gas exploration business with hype about owning an oil well, you can almost bet more downside is out there.

More after this…

Let It Rain

Southern California is soaking it up this morning…more than an inch of rain in SoCal has at least started to put an end to the drought. Not that it’s over, but some rain is better than none.